The Non-Disclosure of Interim Voting Information
Broadridge, as agents for brokers and other intermediaries, collects and tallies voting instructions. Eventually the information will be included on a proxy card and sent to the issuer. Until then, however, Broadridge is in the possession of interim voting information, information that is strategically important to companies and shareholders. As we have discussed and as the SEC's Investor Advisory Committee has noted, the interim voting information is not distributed on an impartial basis. In exempt solicitations, the information is routinely given to issuers. Shareholders engaging in a solicitation, however, do not automatically receive the information. In that regard, we note these passages from a letter sent to the SEC by CII:
- It is our understanding that during this proxy season many companies simply refused to respond to shareowner proponent requests for preliminary voting results. We are hopeful that companies and Broadridge will heed your call and promptly establish a mechanism prior to the 2016 proxy season “that provides interim vote tallies to shareowner proponents.
- In our view, in order to level the field, any possible solution must include, as you described, an “agree[ment] or consent” by companies and Broadridge to promptly provide the interim vote tallies to shareholder proponents when requested. In that regard, we note that the potential agreement, referenced in your remarks, that the Council, the Society and Broadridge had been working on—and for which Broadridge unexpectedly rejected—was a positive step forward. The potential agreement, however, fell far short of a “possible solution” because it failed to include any formal or informal agreement or consent by companies to participate in the arrangement.
- If companies and Broadridge are unwilling or unable to establish a mechanism prior to the 2016 proxy season that provides interim vote tallies in an impartial manner to shareowner proponents, we respectfully reiterate our prior requests, consistent with the recommendation of the Securities and Exchange Commission’s (SEC or Commission) own Investor Advisory Committee, that the Commission take prompt action, in your words, “to level the playing field, such that everyone gets preliminary vote tallies, or nobody gets them.”
The playing field needs to be leveled, something that will apparently require direct action by the Commission.